School district seeks exception to raise taxes

In a legal notice published in Tuesday’s Times Observer, the Warren County School District announced that it will be seeking an exception that permits a tax increase above the state-allowed index.

The added revenue would be utilized to assist the district in covering its obligations to the Public School Employees’ Retirement System.

“The School District real estate tax increase for the next fiscal year is limited to the index percentage unless the proposed tax rate is approved by voters pursuant to a referendum or the School District qualifies for an Act 1 referendum exception,” the notice reads. “As a result of special circumstances covered by an Act 1 referendum exception, a tax rate percentage increase above the index is required to balance the School District budget for the next fiscal year. This tax increase is required to provide a quality education program as reflected in the School District’s preliminary budget.”

The Pennsylvania Department of Education offers several different exceptions. For the retirement exception, the district is eligible if payments to PSERS are projected to be greater in 2013-2014 than they are in 2012-2013. In that case, “the school district will be eligible for an exception equal to the portion of the estimated payment increase that exceeds its index,” according to PDE.

“Last year, the WCSD was approved for the retirement exception by PED,” Business Manager Jim Grosch said on Tuesday. “This generated $315,892 of revenue or the equivalent of .7818 mills.”

What the current exception application might bring in is not yet clear. Grosch explained that the outcome can not be determined until the calculations are completed and approved by PDE. He said the submission date to PDE is in early March.

When previewing the preliminary budget earlier in December, former Superintendent Brandon Hufnagel said the district’s contribution to PSERS will increase as much as $1.45 million in 2013-2014. At the time, he expected that the district would likely pursue the exception.

The preliminary budget, released last month, sets total expected revenue for 2013-2014 at $65,956,569 with total expenditures estimated at $70,111,741.

Tax increases were not included in the preliminary budget. According to the state index, the district can increase taxes at a level of 2.5 percent, approximately 1.274 mills.

By approving a preliminary budget, the district retained the option of attempting to increase taxes above the state index via referendum.